ITC LIMITED

Mariam
Khan PGPM-
Business

strateGy
Introduction
 Type: Public (BSE:ITC)
 Founded: 24 August 1910
Radha Bazar Lane, Kolkata, India
 Headquarters: Kolkata, India
 Key people: Yogesh Chander Deveshwar, Chairman
K. Vaidyanath, Director, Partho Chatterjee, CFO
 Industry: Tobacco, foods, hotels, stationery, greeting cards
 Products: Cigarettes, packaged food, hotels, apparel
 Employees: over 25,000 (2009)
 Website: http://www.itcportal.com/
 Forbes Global 2000 List: 987 rank (2009)
 Sales (Rs.crore):15388.11
 Profits (Rs. million): 32636
 Market Value($ billion): 13.48
“From a leading cigarette manufacturer to an
umbrella group that offers a diversified product
mix”
 ITC's diversification into related and unrelated areas in recent years
Why they did this ?

•Huge Impostion of Govt. on Cigarette Market

•To reduce dependence on cigarette business

How they did ?

•The Company’s relentless efforts to create value through International quality

products.
•Significant investments in technology and product development
•Strong portfolio of brands have enabled it to maintain its leadership position in
terms of market standing and share.
•Customization of product
BCG MATRIX FOR ITC LTD -
Stars ?
Hotels FMCG- Foods
Paperboards/
Packaging.
Agri business.
Cows Dogs
FMCG- Maybe ITC
Cigarettes InfoTech.
ITC PRODUCTS

FMCG-FOOD
Packaged Food
Snack & confectionery
Indian Packaged Food industry

2. With improving living standards, Indian consumers are now becoming

more Hygiene and health-conscious

4. Demand for neat and tidy packaged branded food in India.

6. The increasing number of working women and fast pace of life change
social structure has driven the demand of packaged branded food.

8. Changing life style, the consumers now look for ways to reduce cooking
time.

10. Processed food output in India is likely to grow by 44.2% to touch US$
90.1 billion, while packaged food sales will increase by 67.5% to reachUS$
21.7 bn by 2012
Snacks and Confectionery Industry
1. The Snacks and confectionery market is equally divided into the
organised and unorganised sector.

3. The market size is estimated to the tune of US$3bn.

5. The organised sector of the snack food market is growing at 15-20

% per year

7. While the growth rate of unorganised sector is 7-8 per cent and
the market

9. Size is estimated to be worth of US$ 1.56 bn.

FMCG –FOODS
 Sales & Market Growth
Sales for FMCG business

35,000

30,000

25,000

20,000
Sales
15,000

10,000

5,000

0
2006 2007 2008 2009

Market for Biscuits

11%
31% 10% Sunfeast
Others
Parle
Priya Gold
Britannia
15% 33%
 Promotion

 Direct marketing:- Sign boards, posters at shops on point of sale

 Sales force
 ITC has just packed a classic punch (Jazz,
Blues, Rocks)
 Interaction with customers in form of
Competitions

ITC. Touching your life. Everyday

 Positioning of ITC

VPN providing SCM, ERP & CRM

F capability M
A e-choupal rural two-way fulfillment A
R capability R
M K
Cigarette Trade Marketing capability E
E
RExpanded FMCG distribution capability T
S S

Branded Lifestyle Education Matches & Personal

Foods retailing Stationery Agarbattis Care
Products

basis for strategic partnerships with other FMCG brand owne

15
Targeting

Bingo –Snacks
 The has flavors such as Masala Chaas, Chatpata Nimbu and Paneer Tikka,
it has variants with truly Indian flavors.
 The segmentation was mainly done on basis of the age of the people. The
primary target for Bingo is 18-30 year old people, who are willing to try out
new flavors more easily than the small kids.
 Bingo is positioned as a youthful and innovative snack.

KOI – READY-TO-EAT CATEGORY) targeted at

 Tourists
 Consumers who order at Home
 NRIs US/ canada Makets –Availabilty in more than 4500 stores
 Women in age group 25 plus

Sunfeast Pasta Treat

 Targeted towards children as Healthy snack
 Youngsters as Fun Food
 Various marketing strategies -
 The Company is planning to double its distribution and its advertisement budget to
counter the PepsiCo's Frito lay.

 “SHARUKH KHAN” “DHONI” & “SURYA”

as brand ambassador of SUNFEAST

 Sunfeast World 10K Bangalore-Brand philosophy -Spread the smile

 E-COMMERCE activities for READY-TO-EAT

Snack brand KOI

 Tie-up with leading portals to promote snack range

 Online advertising & can order snack on toll-free number –

1600

 ITC Foods has contract manufacturing facility.

 Panel tastes & approves it before processing takes place.

Organizational Structure for
FMCG Foods
 Important factors

CREDIT SYSTEMS MARGINS

PROMOTIONS FOOD STOCK OUTS

DISTRIBUTION CHANNELS WASTAGES

Distribution of Food Products
 Strict compliance standards, low profit margins, intense competition, high customer-service
expectations.

 Fast and effective sales ordering processes.

 Flexibility
 Quick reaction

 ITC uses FIFO method

 They also keep the good on constant move from low sales area to high sales area.

 The company collects all the expired goods four times a year, and destroys them.

 Retailers must return expired or damaged products within six months after the date of expire.

 Adjustment for them is done in three months time.

 ITC provides their retailers with racks, hangers, etc to display the products.

 The benefits received by the retailers depend upon their sales volume and also the location of
their shops.

 ITC has hired IMRB to do the market research.

CNF
Flow Diagram
FACTORY

WHOLESALE
DEALER BASE

WHOLESALE RETAILER
DISTRIBUTO
R
Places

ITC. Touching your life. Everyday

 e-Choupal
 To Tackle Challenges
 Fragmented farms
 Weak infrastructure
 Involvement of various intermediaries
 e-Choupal unshackles
 low investment
 low productivity
 weak market orientation
 low value addition
 low margin
 low risk taking ability

e-Choupal
 Mandi e-Choupal
Inbound
Pricing
Logistics

Display & Inbound

Inspectio Logistics
n

Auction Operational Inspection

Process & Grading

Bagging &
weighing Weighing &
Payment

Payment

Hub
Outbound Logistics
Logistics
Business Model
The e-Choupal Services
Information

Knowledge

Purchase-choupal saagar
Sales
Distribution Challenges
 first time internet users
 infrastructural inadequacies,
 How challenges are
encountered Solar Power
 Power back
 Upgrading BSNL exchanges
by installation of VSAT VSAT equipment
equipment,
Mobile Choupals, 24x7
helpdesk etc
Mobile Choupal
Over Coming Challenges
Through
 Trustmanship
 Creating Goodwill
 NEW PRODUCTS LAUNCHED-2008-09

Paperkraft Copier Paper

Classmate Invento Classmate Pencils

Classmate Pens
Mangaldeep Durbar Gold Mikkel

Classic Verve Fortune Select Dasve Fortune Select Manohar

 No Questions

 Thank you ..